ניירות דיון 2026

WP 1-2026 Estimating the Impact of Loan Supply Shocks. Nittai K. Bergman, Alejandro Casado, Rajkamal Iyer, and Itay Saporta-Eksten

Abstract

Using a simple model of firm borrowing with standard ingredients, we show that commonly used empirical approaches in the literature do not recover the impact of credit supply shocks on loan-level lending, on total firm-level borrowing or on real outcomes. We propose new estimators that recover these effects.

We apply our methodology to the 2011 credit crisis in Spain and show that it implies significantly smaller effects of loan supply shocks than those generated by current empirical approaches.